There’s going to be a lot of change in 2020. And Australia burning isn’t the only thing you need to be watching.
Have you seen the price of gold over the last few weeks?
Right now, gold is hovering around US$1,551. Aussie gold is around $2,234.
That’s higher than I expected when you heard from me last year.
But it just goes to show the power behind ‘breaks’. A break is a term you use in technical analysis when you draw patterns on the chart.
When the share moves either higher or lower than the pattern, it’s called a break.
So, you may be wondering…is now the time to buy?
You could have bought this break
To answer that, you need to remind yourself of these two things…
Firstly, gold is a crisis metal. It historically performs well in times of crisis. Right now, that crisis involves the Middle East. Yet again.
Secondly, it’s a metal that is bought up near the Chinese New Year.
Of course, gold moves for many more reasons than that. But for today, let’s keep it simple.
But first, here’s the price of gold since year heard from me last.
As you may be able to see, once gold moved above the pattern, the price of gold accelerated.
If you missed this pattern last year, you can read the original article here.
Calling the move higher on gold was a lucky move. I’ll admit, I was cautious of a move lower. But the lows were spot on. I’ll take that as good calls don’t come often.
It’s also one of the reasons why you don’t take any bets until you have confirmation of the move.
With hindsight on our side right now, buying the break would have been a good move.
You can’t trade on hindsight, though. But it is a good place to go when you want to learn.
Here’s why gold may be moving higher
Anyway, let’s get back to it…
Let’s look at the two catalysts that may be moving the price of gold higher.
The first is the current tensions in the Middle East.
Which you may have already seen in the news. General Qasem Soleimani, known as the most feared man in the Middle East, was assassinated.
That was on 3 January. Done by a drone strike. As a result, US gold moved higher 1.55%.
But the price of gold broke out on 24 December. Over a week before the US strike on General Qasem.
Either someone knew about these tensions in advance, or there’s something else going on…
If you asked me, I like to keep thing simple.
Why you may want to sit and watch
It’s one of the reasons why I always keep my eyes on the Chinese New Year period.
The Chinese New Year is based on the lunar calendar. It fluctuates slightly from year-to-year.
Sometimes it comes in January, other times it’s not until mid-February. If you wanted to keep track of this, just watch for the second new moon after the Winter Solstice.
Our summer is their winter, just in case you didn’t know.
One thing’s for sure…the price of gold tends to move higher over this period.
I’ve seen dealers put a premium on the price of gold, too. I alerted this to you when I initially joined Callum at Profit Watch.
Though, high prices may put a dent in the Asian physical gold demand this year.
But it’s something to keep your eye on.
So, is now the time to be buying gold? Well, that’s up to you.
From my experience, December is a good time to be buying physical gold.
But January and February would see me holding off and watching to see how volatile the markets would be. You may want to do the same, too.
I anticipate the gold price to cool down soon. Let’s wait and see what happens around 10–13 January. And then later near the Chinese New Year period 24–27 January.
Until next time,